The construction industry is complex and dynamic, defined by concurrent timelines, multifaceted materials, and a confluence of vendors, workers, and professionals who bring them all together. It’s no surprise that the secret behind the success of many construction firms is a well-managed Enterprise Resource Planning (ERP) system.
ERP implementation in the construction industry can improve operational efficiency, cost control, and project management. It’s why so many firms are coming around to adopting and deploying software to oversee every critical component of their projects.
Let’s explore how a construction ERP system can enhance your operations.
What is construction ERP software?
Enterprise resource planning platforms are a staple software in many industries—construction included. ERP software helps companies streamline and automate vital business processes, including project management, accounting, procurement, inventory, and scheduling. What makes construction ERP software special is that it’s designed for this industry, around the variables that define a successful construction project.
Construction ERP software provides real-time data and analytics that enable design-build and contracting firms to make informed decisions, identify and mitigate risks, and maximize profitability—both before and during a project. More importantly, it allows firms to track every quantifiable aspect of a project from start to finish, including labor, equipment, and material costs.
Beyond managing the day-to-day operations of a construction business, ERP software can also help with long-term planning and forecasting. For example, it can help companies to identify trends in their specific sector, forecast demand for labor and materials, and plan for future projects.
The benefits of ERP software for construction companies
Implemented and managed effectively, ERP software for construction companies can unlock tremendous opportunities—and even competitive advantages. These benefits stem from improved project management oversight, streamlining processes, and increased visibility into all aspects of not only projects but also company operations.
For example, today’s smart ERP software can automate workflows, provide real-time project data, and facilitate collaboration between teams. The result is better communication and more efficient project completion.
The same goes for financial management—one of the biggest challenges on any project. Within an ERP system, builders can track costs and expenses across multiple projects, analyze profitability, and make data-driven decisions based on accurate and up-to-date financial information. The resulting insights (and action) can help reduce costs, increase revenue, and improve the bottom line.
From better visibility into supply chain management to optimization of assets and inventory, here’s a look at more of the groundbreaking benefits ERP offers to construction companies:
- Business intelligence and data analytics at the project and company level
- Cross-project collaboration and improved communication
- Customizable solutions for asset, inventory, and supply chain management
- Risk management and data security for critical project documentation
- Workflow visibility and process documentation to create accountability
Top features to look for in a construction industry ERP
The construction industry is diverse and, similarly, so is the landscape for ERP software. To maximize implementation and realize the full potential of an ERP solution, construction companies need to keep the following key features in mind:
- Project management. An ERP system should include project management tools that track the entire project lifecycle, from pre-planning to completion. Important oversight areas include scheduling, budgeting, costing, and resource management.
- Job costing. Construction project costs are constantly in flux, including materials, labor, equipment, and overhead. An ERP system needs to have robust job costing functionality to accurately track and allocate spend specific to different phases and tasks.
- Procurement management. Procurement management folds into supply chain management: a critical facet of success for construction companies. ERP software should offer tools to help track purchase orders, approvals, and inventory levels across jobs.
- Resource scheduling. Managing resources—including labor and equipment—is an ongoing struggle in construction. ERP features around resource scheduling can help maximize the availability of essential assets across job sites.
- Financial management. It’s critical to have clear oversight on progress billing, change orders, and retention, among other financials. An ERP system offers features to help in managing these transactions—and to ensure accurate accounting.
- Reporting and analytics. While construction happens on-site, reporting and analytics help managers gain insights into project performance, financials, and other key metrics. This helps when making data-driven decisions that optimize project performance.
These features are only some of what today’s construction ERP platforms offer—and they’re far from an exhaustive list. Automation, integrations, and cloud functionality are also important aspects to consider and can drive the efficacy of many of the core functions mentioned above.
How to choose a construction ERP system
With so many features (and benefits) to consider, the question becomes one of choosing an ERP system that builds everything your firm needs. What should construction companies look for when choosing a construction ERP?
Above all, identify the specific functionalities you need—likely features such as project management, accounting, inventory management, and scheduling. At the same time, consider the size of your company, the number of users that will use the system, and the level of customization and scalability required.
Keep in mind that an ERP system needs to be encompassing to work effectively. That means also considering integration capabilities. The system should be able to integrate with other applications and software tools you use over the course of project planning and build execution—CAD software or your payroll software, for example. The ERP needs to operate seamlessly with your existing technology infrastructure.
Finally, consider vendor experience. Is this a construction ERP platform or just a general ERP? There’s a difference and it matters! It’s also smart to get a clear understanding of the level of support and training they offer. The vendor should have a deep understanding of the industry’s unique requirements and offer ongoing support to ensure the successful implementation and adoption of their ERP system.
What is the best ERP for construction companies?
There’s no shortage of construction ERP solutions available today—many of which are highly regarded thanks to the benefits they’ve delivered to organizations big and small. If you’re just beginning your search for a solution to help you track and manage the many facets of your operation, consider starting with one of the most well-known ERP software options: Sage Intacct.
Sage Intacct offers tailored features and comprehensive functionality that align specifically with the construction industry’s unique requirements. With its robust project accounting capabilities, this ERP solution enables construction companies to efficiently manage complex projects, track costs, and accurately allocate resources. The software offers real-time visibility into project performance, allowing construction firms to make informed decisions and effectively monitor budgetary constraints.
Additionally, Sage Intacct streamlines financial processes by automating tasks like invoicing, accounts payable, and financial reporting, saving time and reducing the risk of errors. The software’s scalability and cloud-based nature ensure that construction companies can easily adapt to growth, handle multiple projects simultaneously, and collaborate seamlessly with various stakeholders.
Get the most out of an investment in construction ERP
By nature, the construction industry is one that revolves around enterprise resources: people, materials, equipment, and timelines. Bringing them all together with construction ERP software is the first step in seeing how each of these critical aspects impacts the other—and how they all come together in a successful project.
The ability to track, manage, and understand scheduling, financials, supply chains, and other critical factors puts construction companies in a position to improve not only their approach to projects, but also how they run their operations. By selecting an ERP system that provides clear oversight and quantifiable insights, they open the door to benefits like increased efficiency, reduced costs, and improved decision-making. Who wouldn’t want to build around that?
Learn about Dean Dorton’s tailored services for the construction industry.
